Complainant

Respondent

Parties

Paudy  O Brien

Pergerine Technologies FPD Recycling

Representatives

Self-represented 

Declan Lynch, Director

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00069509-001

24/02/2025

The Complainant is the CEO of the Respondent company.

On 24 February 2025, the Complainant referred his complaint to the Director General of the WRC pursuant to the Organisation of Working Time Act, 1997 alleging that he did not receive his paid holiday /annual leave.

In the WRC complaint referral form, the Complainant stated that he is a full-time employee with a formal employment contract as CEO of FPD Recycling since 2019. The Complainant is also the majority shareholder.

The Complainant submits that in 2024 he was entitled to 27 days leave but was only able to take 3 days due to business demands. In 2023 he accrued 10 additional holidays due to excessive weekend work-related travel. The Complainant claims that he had 52 days of outstanding leave to be carried over from 2023 and 2024.

The Complainant submits that, despite making repeated efforts to take his leave, he was unable to do so because of exceptional operational constraints beyond his control, including loss of key personnel and hiring freeze.

The Complainant submits that, given the legal principle that work-related travel time should be counted toward working hours and compensated accordingly, additional working days should be considered part of his holiday entitlement.

The Complainant submits that at no point did the Respondent propose an alternative plan that would have allowed him to step away from critical responsibilities.

The Complainant submits that his employment contract allows for the carryover of 5 days into the following year. However, this does not override his statutory right to carry over additional leave in exceptional circumstances, as supported by Irish law and European Court of Justice (ECJ) rulings.

The Complainant submits that, given the constraints that prevented him from taking leave, he was entitled to carry over his full untaken statutory leave from 2023 and 2024.

The Complainant submits that between December 2024 and February 2025 he raised the issue multiple times with the Respondent. Despite repeated follow-ups, the Respondent has failed to act in good faith and refused to acknowledge the exceptional circumstances.

The Respondent’s CFO Mr Declan Lynch has taken a rigid stance that the Complainant had control over his own schedule and should have ensured his leave was taken. However, the Respondent's budget constraints, staff losses, and hiring freezes made it impossible for the Complainant to take leave without negatively impacting business operations.

The Respondent’s position ignores its legal obligation under Irish employment law and ECJ case law (Schultz-Hoff v. Deutsche Rentenversicherung Bund), which states that leave cannot lapse if the employee was unable to take it due to work demands beyond their control.

Legal basis for the complaint

The Complainant submits that the Organisation of Working Time Act, 1997, Section 2(7), states: "The pay in respect of an employee's entitlement under this section shall not be provided in lieu of the employee taking the holidays to which he or she is entitled, except where the employee ceases to be employed by the employer."

ECJ rulings confirm that statutory leave cannot be forfeited if the employee was unable to take it for valid reasons beyond their control.

The Respondent’s failure to facilitate the Complainant’s leave, acknowledge additional work-related travel days, and implement proper planning has led to this dispute.

The Complainant requests that the WRC direct the Respondent to:

·       Recognise the 52-day carryover claim due to exceptional circumstances in 2023 and 2024.

·       Acknowledge the additional leave accrued due to significant weekend work-related travel for the company.

·       Ensure compliance with Irish and EU employment law going forward, including proper facilitation of statutory leave for senior employees.

On 2 July 2025, the Complainant provided the following submission.

The Complainant submits that the Respondent acknowledged the validity of this claim during discussions leading to a Transition Agreement signed on 15 June 2025 by the Respondent, and subsequently issued a payment on 26 June 2025 which was intended to settle the matter. This settlement was based on the information the Complainant had provided to the WRC, the number of days was not contested by the Respondent.

While the company issued a gross payment purporting to resolve this holiday entitlement claim, it applied a €56,000 deduction on the payslip labelled as a Benefit-in-Kind (BIK) tax clawback.

The Complainant submits that section 5 of the Payment of Wages Act 1991 states: "An employer shall not make any deduction from the wages of an employee unless — (a) required or authorised by statute, (b) authorised by the terms of the employee’s contract, or (c) made with the prior consent of the employee."

This €56,000 deduction was not authorised under contract or statute and was made without notice or consent. Therefore, even if the gross amount was correct, the net payment was unlawfully reduced, in direct breach of this Act.

The Respondent’s actions mean that the holiday entitlement due remains partially unpaid. The deduction applied has materially reduced the value of the payment intended to settle the complaint. This:

·       Leaves the original complaint unresolved;

·       Constitutes a breach of the Transition Letter Agreement (Clause 4.1), which prohibits further claims or deductions unless disclosed before execution;

·       Demonstrates bad faith, as this action was taken after agreement was reached and without any supporting explanation or policy.

At the adjudication hearing, the Complainant did not dispute that he had signed an agreement compromising all claims he might have against the Respondent. The Complainant also did not dispute that he had the benefit of legal advice before he signed the agreement. The Complainant confirmed that his complaint related to ab alleged breach of the terms of the agreement and the taxation implications of the payment made to him on the basis of the agreement.

The Respondent submits that the matter raised in the Complainant’s claim has already been fully and finally resolved by way of a Transition Agreement signed and executed by all parties and dated 18 June 2025.

The Respondent submits that, in accordance with the legally binding agreement, the agreed accrued salary and contractual benefits were included in June 2025 payroll calculations for the Complainant. A further agreed payment was made specifically in respect of alleged outstanding annual leave of 52 days. These sums were processed and paid via payroll, with the appropriate PAYE, PRSI and USC deductions, and were reflected on the Complainant’s payslip. The Respondent exhibited a copy of the payslip and proof of payment to the Complainant’s bank account.

The Respondent submits that in line with clause 4.4. of the Transition Agreement, the Complainant specifically waived any and all claims under the Organisation of Working Time Act, 1997 and confirmed that no further claim would arise in respect of the holiday entitlement now paid. In addition, the Complainant acknowledged that he would withdraw the WRC complaint.

The Respondent submits that on 1 July 2025, the Complainant informed the Respondent’s solicitors that due to the Respondent’s decision to deduct tax in respect of Benefit-in-Kind (BIK) or notional pay relating to a company car, he would no longer be withdrawing the WRC claim.

The Respondent submits that the taxation matter does not impact the validity or enforceability of the Transition Agreement and/or detract from the fact that payment net of taxes has been made in respect of the alleged outstanding annual leave of 52 days.

The Respondent further submits that, as of the date of the hearing, the Complainant was still in employment with the Respondent and, therefore, payment on cessation of employment did not arise.

The issue that I must decide upon first relates to the jurisdictional issue raised by the Respondent as to whether the Complainant has compromised his right to pursue his complaint because of the settlement agreement dated 18 June 2025.

I note that the agreement includes provisions within which the Complainant agreed to waive his right to initiate any future claims against the Respondent, including any claims under the Organisation of Working Time Act, 1997 (as amended). The Complainant did not dispute that he signed the settlement agreement and that he availed of legal advice in so doing.

I note that the terms of the signed agreement “provide a full and final settlement and satisfaction of all or any claims, complaints or demands that POB [the Complainant] has or may have against the Company and/or any Group Company or any servants or agents, directors, members or employees thereof arising out of or connected with the employment of POB and/or the resignation whether known or unknown, and, subject strictly to the Company making the payments due under clauses 3.2 and 3.3 above, POB hereby irrevocably and unconditionally waives any and all claims, complaints or demands (whether known, unknown or otherwise) that he has or may have against the Company or any Group Company, or any servants or agents, directors, members or employees thereof in respect of or arising in any way out of the employment of POB and/or resignation of POB’s employment and POB fully and finally releases all of the Company, the Group Companies and any servants, agents, officers, employees, shareholders and directors thereof from any and all such claims and also from any other claims, complaints or demands (whether known or unknown, asserted or unasserted) which he may have or be entitled to bring as at the date of this Letter arising in any manner whatsoever from events taking place up to the date of this Letter, whether arising under statute or any regulations made thereunder or statutory amendments thereto, including the following:

…

(q) the Organisation of Working Time Act 1997;”

“4.2 Subject strictly to the Company making the payments due under clauses 3.2 and 3.3 above, POB hereby irrevocably and unconditionally waives and releases any and all such Released Claims that he has or may have against the Company or any Group Companies and agrees not to sue, commence, voluntarily aid in any way, prosecute or cause to be commenced or prosecuted against the Company or Group Companies or any servants or agents, directors, members or employees thereof any action, suit or other proceeding concerning the Released Claims, anywhere in the world.

4.3 Clause 4.2 shall not apply to, and the Released Claims shall not include any claims in respect of any breach of this Agreement.

4.4 Without prejudice to the operation of paragraphs 4.1 and 4.2,:

(a) POB agrees to withdraw his claim under the Organisation of Working Time Act 1997 bearing Adjudication Number ADJ-00057182 CA-00069509;

(b) POB hereby confirms that on receipt of the Resignation Payment, he shall have no claim in respect of any alleged outstanding annual leave entitlements, which the Parties agree shall have been deemed to have been fully satisfied as at the Resignation Date. For the avoidance of doubt, any annual leave accruing between the Resignation Date and the Termination Date (being 4.5 days, in accordance with POB’s employment contract) must be taken by POB prior to the Termination Date;

5 Legal Advice

5.1 POB acknowledges and agrees that before signing this Letter he has had an opportunity to obtain independent legal advice with regard to his legal rights and the consequences and legal effect of this Letter from his solicitors, W&E Bradshaw Solicitors of 77 Merrion Square South, Dublin 2. POB confirms that he understands and accepts the contents of this Letter in full.

5.2 POB confirms that he has signed this Letter with full understanding that he is releasing and compromising the Released Claims as more particularly set out in paragraph 4.”

I have considered the High Court judgment of Smyth J. in the case of Sunday Newspapers Limited v. Stephen Kinsella & Luke Bradley [2008] 19 E.L.R. 53. This case concerned a severance agreement purporting to compromise entitlements under the Protection of Employees (Fixed-Term Workers) Act, 2003. Smyth J. held that the question of whether statutory rights have been compromised is a matter for the proper construction of the agreement itself and that informed consent and appropriate advice is crucial if the compromise is to be upheld. The judgment went on to state that where an employee is being offered a severance package he or she is entitled to be advised of his or her entitlements under the employment protection legislation and any agreement should list the various applicable statutes or at least make it clear that the same has been considered by the employee.

Smith J. also endorsed the dicta of the Circuit Court in Donal Hurley v. the Royal Yacht Club [1997] E.L.R. 225 wherein Buckley J. set out the following principles in relation to settlement agreements: 

“I am satisfied that the applicant was entitled to be advised of his entitlements under the employment protection legislation and that any agreement or compromise should have listed the various Acts which were applicable, or at least made it clear that they had been taken into account by the employee. I am also satisfied that the applicant should have been advised in writing that he should take appropriate advice as to his rights, which presumably in this case, would have been legal advice. In the absence of such advice I find the agreement to be void.”

Further, in Starrus Eco Holdings Limited t/a Greenstar v. Gerald O’Reilly UDD1868the Labour Court concluded that it did “not have jurisdiction to go behind the waiver agreement entered into by the Parties.”

In applying these principles to the instant case, I am satisfied firstly as a matter of construction, that the purpose of the settlement agreement concluded between the parties was “thecompromise of all claims and complaints [the Complainant] has or may have in connection with his employment and/or his resignation thereof against the Company and/or any Group Company and/or any of its/their current or former directors, officers, employees, servants or agents…”

I have carefully examined the content of the agreement, and I am satisfied that the provisions of the agreement specifically preclude the Complainant from initiating any complaint against the Respondent under a wide array of stated employment enactments including the Organisation of Working Time Act. 1997.

The Complainant specifically agreed to “withdraw his claim under the Organisation of Working Time Act 1997 bearing Adjudication Number ADJ-00057182 CA-00069509.”

Secondly, I am satisfied that the Complainant acknowledged and agreed that before signing of the agreement he has had an opportunity to obtain independent legal advice with regard to his legal rights and the consequences and legal effect of the agreement from his solicitors, W&E Bradshaw Solicitors. The Complainant further confirmed that he understood and accepted the contents of the agreement in full. The Complainant confirmed that he has signed the agreement with full understanding that he was releasing and compromising the released claims as set out in paragraph 4 of the agreement.

At the adjudication hearing, the Complainant confirmed that he signed the agreement with the full knowledge of the impact of the agreement on his legal rights. The Complainant also confirmed that he had acknowledged that he understood the effect and the implications of the agreement. However, the Complainant clarified that his claim was regarding the manner in which the agreement was implemented.

Having carefully considered the matter, I find that there was fully informed consent on the part of the Complainant and that he signed the settlement agreement with the benefit of informed consent.

Having regard to the foregoing, I find therefore that the settlement agreement as signed by the parties compromised any claims the Complainant has arising from his employment with the Respondent under the Organisation of Working Time Act, 1997 (as amended). Accordingly, I find that I do not have jurisdiction to investigate the complaint.

I find that the Transition Letter Agreement dated 18 June 2025 compromised any claims the Complainant has under the Organisation of Working Time Act, 1997 (as amended). Accordingly, I do not have jurisdiction to inquire into the complaint referred by the Complainant to the Director General under this enactment. I declare this complaint to be not well founded.

Compromise agreement – annual leave